A standard recruitment placement earns an agency 15–25% of the hired candidate's first-year salary. That fee is paid once, per hire, and only when the placement is made. The agency takes the risk: if the search fails, they earn nothing.
A pipeline sale works differently. The agency builds a database of pre-screened candidates — typically sourced through job postings, LinkedIn outreach, and referrals — and packages them as a curated, ready-to-access talent pool. They then approach companies with a proposition: instead of waiting for a search, you can access our bench of candidates immediately, on a retained or subscription basis.
This model is more profitable and less risky for the agency. The cost of sourcing candidates — writing and posting job ads, fielding applications, conducting initial screens — is shared across many potential buyers rather than charged to a single search. The same candidate can be in pitches to multiple clients simultaneously.
The candidates in these pipelines are rarely told this is how their data is being used. They applied to what appeared to be a real job. They are now an asset in a commercial transaction they did not consent to.